USD/JPY movement is supported by a rising trend line. The pair has been supported by a bullish trend line since November 11. The 20-period moving average stays above the 50-period one, and the relative strength index stays above its neutrality area at 50.
On Monday, U.S. stocks ended mixed with the Dow Jones Industrial Average advancing for a sixth consecutive session to another record high of 18,868 (+21 points, 0.1%). UnitedHealth Group jumped 4.0% and McDonald's gained 3.2%. Banks continued to shine, and real estate shares also outperformed.
On the other hand, the S&P 500 was largely unchanged at 2,164, and the Nasdaq Composite eased 18 points (-0.4%) to 5,218.
As long as 107.30 holds on the downside, further bounce is expected to 108.75 and 109.85 as next targets.
Trading Recommendation: The pair is trading above its pivot point. It is likely to trade in a wider range as long as it remains above its pivot point. Therefore, long positions are recommended with the first target at 108.75 and the second one at 109.85. In the alternative scenario, short positions are recommended with the first target at 106.15 if the price moves below its pivot point. A break of this target is likely to push the pair further downwards, and one may expect the second target at 104.95. The pivot point lies at 107.30.
Resistance levels: 108.75, 109.85, 110.15
Support levels: 106.15, 104.95, 104.25
The material has been provided by InstaForex Company - www.instaforex.com